{
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  "slug": "glossary-of-investment-terms-matthews-united-states-5066140",
  "id": 1780034329155066140,
  "record_id": 1779994854454960365,
  "headline": "Glossary of Investment Terms | Matthews | United States",
  "summary": "",
  "source": "matthews-asia",
  "source_url": "https://matthewsasia.com/resources/support/glossary",
  "home_domain": "economics-business-work",
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  "sentiment": "neutral",
  "significance": "low",
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  "reading_time_minutes": 18,
  "published_date": "2026-05-28",
  "created_on": "2026-05-29T05:58:48.850040+00:00",
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      "text": "The calculation of Active Share will result in an active share number between 0%, which indicates the portfolio perfectly replicates the benchmark, and 100%, which indicates there is no overlap whatsoever between the portfolio and the index.",
      "evidence_type": "direct_quote",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-05-28"
    },
    {
      "id": 1780034329479624506,
      "text": "An American depositary receipt (ADR) is a negotiable certificate issued by a U.S. depository bank representing a specified number of shares often one share of a foreign company's stock.",
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      "id": 1780034329484711198,
      "text": "The ADR trades on U.S. stock markets as any domestic shares would.",
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    },
    {
      "id": 1780034329486266320,
      "text": "Alpha, a commonly quoted indicator of investment performance, is defined as the excess return on an investment relative to the return on a benchmark index.",
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      "text": "An American depositary receipt is a negotiable security that represents securities of a non-U.S. company that trades in the U.S. financial markets.",
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      "text": "A-shares are shares in mainland China-based companies that trade on Chinese stock exchanges such as the Shanghai Stock Exchange and the Shenzhen Stock Exchange.",
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      "text": "One basis point equals 1/100th of 1%.",
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      "id": 1780034329513556819,
      "text": "For example, 125 basis points equal 1.25%.",
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      "text": "Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole.",
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      "text": "B-shares are mainland Chinese companies listed on the Shanghai and Shenzhen stock exchanges, available to both Chinese and non-Chinese investors.",
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      "text": "The Bloomberg Barclays Global Aggregate Bond Index (Global Agg) is an index of global investment grade debt from twenty-four local currency markets.",
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      "text": "This multi-currency benchmark includes treasury, government-related, corporate and securitized fixed-rate bonds from both developed and emerging markets issuers.",
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      "text": "Credit ratings are issued by three major credit rating agencies: S&P, Moody's and Fitch.",
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      "text": "If a bond is rated AAA to BBB-, then it is considered investment grade.",
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      "text": "If a bond is BBB- to C-, it is considered as high yield.",
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      "text": "If a bond is below C-, it's a defaulted bond.",
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    },
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      "id": 1780034329546034286,
      "text": "Bottom-Up Investing is an investment approach that de-emphasizes the significance of economic and market cycles.",
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      "id": 1780034329548579292,
      "text": "This approach focuses on the analysis of individual stocks.",
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      "text": "In bottom-up investing, an investor focuses his or her attention on a specific company rather than on the industry in which that company operates or on the economy as a whole.",
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      "id": 1780034329559728916,
      "text": "The Bovespa Index is a gross total return free-float market-weighted index comprised of the most liquid stocks traded on the S\u00e3o Paulo Stock Exchange.",
      "evidence_type": "direct_quote",
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      "home_domain": "economics-business-work",
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    },
    {
      "id": 1780034329562445530,
      "text": "Capital Expenditure (CapEx) is an amount spent by a company to acquire or significantly improve the capacity or capabilities of a long-term asset such as equipment or buildings.",
      "evidence_type": "direct_quote",
      "confidence": "stated",
      "home_domain": "economics-business-work",
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    },
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      "id": 1780034329564687481,
      "text": "China-Affiliated Corporations [CAC], also known as \"Red Chips,\" are mainland China companies with partial state ownership listed in Hong Kong, and incorporated in Hong Kong.",
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      "home_domain": "economics-business-work",
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      "text": "Compound Annual Growth Rate (CAGR) is the year-over-year growth rate of an investment over a specified period of time.",
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      "text": "Conditional VaR (CVaR) is a risk assessment measure that quantifies the amount of tail risk an investment portfolio has.",
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      "id": 1780034329572833195,
      "text": "CVaR is derived by taking a weighted average of the \"extreme\" losses in the tail of the distribution of possible returns beyond the value at risk (VaR) cutoff point.",
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      "text": "The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.",
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      "text": "A credit spread measures the difference in yield between an investment grade (AAA) government bond and another fixed income security with the same maturity.",
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      "text": "Credit spreads reflect the additional risk associated with an issuer above the government bonds.",
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      "id": 1780034329592112629,
      "text": "Issuers with lower bond ratings and higher default risks need to offer higher yields to compensate for the higher risk.",
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      "text": "Lower rated bonds typically have higher credit spreads.",
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      "confidence": "stated",
      "home_domain": "economics-business-work",
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    },
    {
      "id": 1780034329600307530,
      "text": "Cross Shareholdings describe a situation in which a publicly traded corporation owns stock in another listed entity.",
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      "confidence": "stated",
      "home_domain": "economics-business-work",
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    },
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      "id": 1780034329610066052,
      "text": "The CSI 300 Index is a free-float weighted index that consists of 300 A-share stocks listed on the Shanghai or Shenzhen Stock Exchanges.",
      "evidence_type": "direct_quote",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-05-28"
    },
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      "id": 1780034329613770581,
      "text": "Default rates refer to the percent of loans that are not repaid within a given sector, region or style of bonds.",
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      "id": 1780034329619266560,
      "text": "For example, if a sector contains 1,000 bonds and 30 bonds default, the default rate would be 3% for that sector.",
      "evidence_type": "direct_quote",
      "confidence": "stated",
      "home_domain": "economics-business-work",
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    },
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      "id": 1780034329622159987,
      "text": "Delta is the ratio that compares the change in the price of an asset, usually a marketable security, to the corresponding change in the price of its derivative.",
      "evidence_type": "direct_quote",
      "confidence": "stated",
      "home_domain": "economics-business-work",
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    },
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      "id": 1780034329626884762,
      "text": "The dividend payout ratio is the ratio of the total amount of dividends paid out to shareholders relative to the net income of the company.",
      "evidence_type": "direct_quote",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-05-28"
    },
    {
      "id": 1780034329630013672,
      "text": "Dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its share price.",
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      "confidence": "stated",
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    },
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      "id": 1780034329638212348,
      "text": "In the absence of any capital gains, the dividend yield is the return on investment for a stock.",
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      "home_domain": "economics-business-work",
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    },
    {
      "id": 1780034329642823279,
      "text": "Dovish describes when a central bank relaxes or loosens monetary policy, such as lowering policy rates or buying assets to add to its balance sheet in order to increase the available money supply within a specific country or region.",
      "evidence_type": "direct_quote",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-05-28"
    },
    {
      "id": 1780034329646138550,
      "text": "\"Dovish\" is also used when a central bank relaxes or loosens monetary policy more quickly than market participants expect, or when a central bank raises interest rates less than expected.",
      "evidence_type": "direct_quote",
      "confidence": "stated",
      "home_domain": "economics-business-work",
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    },
    {
      "id": 1780034329650086455,
      "text": "The up and down capture is a measure of how well a manager was able to replicate or improve on phases of positive average monthly benchmark returns, and how adversely the manager was affected by phases of negative average monthly benchmark returns.",
      "evidence_type": "direct_quote",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-05-28"
    },
    {
      "id": 1780034329654382805,
      "text": "Earnings Before Interest and Taxation (EBIT) Margin is a profitability measure equal to EBIT divided by net revenue.",
      "evidence_type": "direct_quote",
      "confidence": "stated",
      "home_domain": "economics-business-work",
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    },
    {
      "id": 1780034329658000195,
      "text": "This value is useful when comparing multiple companies, especially within a given industry, and also helps evaluate how a company has grown over time.",
      "evidence_type": "direct_quote",
      "confidence": "stated",
      "home_domain": "economics-business-work",
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    },
    {
      "id": 1780034329662947343,
      "text": "Earnings Before Interest and Taxation, Depreciation and Amortization (EBITDA) is a measure of a company's earnings before considering the financing of that company (the share of equity capital and debt employed), and disregarding potential depreciation and amortization policies, which can be very different.",
      "evidence_type": "direct_quote",
      "confidence": "stated",
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      "published_date": "2026-05-28"
    },
    {
      "id": 1780034329666857688,
      "text": "EBITDA allows like-for-like comparisons between different companies' performance.",
      "evidence_type": "direct_quote",
      "confidence": "stated",
      "home_domain": "economics-business-work",
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    },
    {
      "id": 1780034329674924719,
      "text": "Earnings Per Share (EPS) is the amount of annual profit (after tax and all other expenses) attributable to each share in a company.",
      "evidence_type": "direct_quote",
      "confidence": "stated",
      "home_domain": "economics-business-work",
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      "id": 1780034329678811766,
      "text": "EPS is calculated by dividing profit by the average number of shares on issue.",
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    },
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      "id": 1780034329682725908,
      "text": "The efficient frontier is the set of optimal portfolios that offer the highest expected return for a defined level of risk or the lowest risk for a given level of expected return.",
      "evidence_type": "direct_quote",
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      "home_domain": "economics-business-work",
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    },
    {
      "id": 1780034329686361972,
      "text": "Economic Value Added (EVA) is a measure of a company's financial performance based on the residual wealth calculated by deducting cost of capital from its operating profit (adjusted for taxes on a cash basis).",
      "evidence_type": "direct_quote",
      "confidence": "stated",
      "home_domain": "economics-business-work",
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    },
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      "id": 1780034329692237643,
      "text": "Emerging Markets are countries that have some characteristics of a developed market, but do not meet standards to be considered a developed market.",
      "evidence_type": "direct_quote",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-05-28"
    },
    {
      "id": 1780034329698572532,
      "text": "This includes countries that may be developed markets in the future or were in the past.",
      "evidence_type": "direct_quote",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-05-28"
    },
    {
      "id": 1780034329706406091,
      "text": "Enterprise Multiple (EV/EBITDA) is a ratio used to determine the value of a company.",
      "evidence_type": "direct_quote",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-05-28"
    },
    {
      "id": 1780034329709391679,
      "text": "The enterprise multiple looks at a firm as a potential acquirer would, because it takes debt into account - an item which other multiples like the P/E ratio do not include.",
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    },
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      "id": 1780034329714104766,
      "text": "Earnings before interest and tax is an indicator of a company's profitability, often calculated as revenue minus expenses, excluding tax and interest.",
      "evidence_type": "direct_quote",
      "confidence": "stated",
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    },
    {
      "id": 1780034329722048343,
      "text": "Enterprise Value (EV) is a measure of a company's value, often used as an alternative to straightforward market capitalization.",
      "evidence_type": "direct_quote",
      "confidence": "stated",
      "home_domain": "economics-business-work",
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    },
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      "id": 1780034329725494121,
      "text": "Enterprise value is calculated as market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents.",
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      "confidence": "stated",
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    },
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      "id": 1780034329734501707,
      "text": "An exchange-traded fund (ETF) is an investment fund traded on stock exchanges, much like stocks.",
      "evidence_type": "direct_quote",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-05-28"
    },
    {
      "id": 1780034329738059139,
      "text": "An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day.",
      "evidence_type": "direct_quote",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-05-28"
    },
    {
      "id": 1780034329741710330,
      "text": "Ex-Date is the date on or after which a security is traded without a previously declared dividend or distribution.",
      "evidence_type": "direct_quote",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-05-28"
    },
    {
      "id": 1780034329471476285,
      "text": "Active Share is calculated by taking the absolute value of the difference between portfolio holdings and benchmark weights, summing all of these differences, and dividing by two.",
      "evidence_type": "direct_quote",
      "confidence": "stated",
      "home_domain": "economics-business-work",
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